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Friday, March 20, 2009

Elliott Wave Update ~ 20 March

The market likes to fool us. When it impulses down like it did last week for a pullback, it reverses hard. When it meanders at the top in corrective waves, you might think there is more bull to come. But alas, it was a likely distribution pattern playing out.

774 support area broke and backtested from underneath and fell back yet again. The retrace is deep enough to confirm wave 1 up (or A) has topped at 803 resistance. I look for a H&S pattern to perhaps form. The move down from peak appears to be a 5-3-5 zig zag playing out and the initial first half 5 waves maybe are not quite finished. Then a B wave should play out in some fashion. This B wave would likely form some kind of right shoulder, even a weak one. Then any break of the Head & Shoudler neckline will set the downside target for the C wave to near term low for wave 2. Thats about as simple as I can get.

The weekly candle is a shooting star, so that suggest 803 will not be breeched next week.

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